1/18/2019 G.R.  No.

 106804

SECOND  DIVISION  

G.R.  No.  106804                          August  12,  2004

NATIONAL  POWER  CORPORATION,  petitioner,  

vs.  
 
COURT  OF  APPEALS  and  ANTONINO  POBRE,  respondents.

D  E  C  I  S  I  O  N

CARPIO,  J.:

The  Case

Before   us   is   a   petition   for   review1   of  the  30  March  1992  Decision2   and   14   August   1992   Resolution   of   the   Court   of
Appeals  in  CA-­G.R.  CV  No.  16930.  The  Court  of  Appeals  affirmed  the  Decision3  of  the  Regional  Trial  Court,  Branch
17,  Tabaco,  Albay  in  Civil  Case  No.  T-­552.

The  Antecedents

Petitioner  National  Power  Corporation  ("NPC")  is  a  public  corporation  created  to  generate  geothermal,  hydroelectric,
nuclear   and   other   power   and   to   transmit   electric   power   nationwide.4   NPC   is   authorized   by   law   to   acquire   property
and  exercise  the  right  of  eminent  domain.

Private   respondent   Antonino   Pobre   ("Pobre")   is   the   owner   of   a   68,969   square-­meter   land   ("Property")   located   in
Barangay  Bano,  Municipality  of  Tiwi,  Albay.  The  Property  is  covered  by  TCT  No.  4067  and  Subdivision  Plan  11-­9709.

In  1963,  Pobre  began  developing  the  Property  as  a  resort-­subdivision,  which  he  named  as  "Tiwi  Hot  Springs  Resort
Subdivision."   On   12   January   1966,   the   then   Court   of   First   Instance   of   Albay   approved   the   subdivision   plan   of   the
Property.  The  Register  of  Deeds  thus  cancelled  TCT  No.  4067  and  issued  independent  titles  for  the  approved  lots.  In
1969,  Pobre  started  advertising  and  selling  the  lots.

On   4   August   1965,   the   Commission   on   Volcanology   certified   that   thermal   mineral   water   and   steam   were   present
beneath   the   Property.   The   Commission   on   Volcanology   found   the   thermal   mineral   water   and   steam   suitable   for
domestic  use  and  potentially  for  commercial  or  industrial  use.

NPC  then  became  involved  with  Pobre's  Property  in  three  instances.

First  was  on  18  February  1972  when  Pobre  leased  to  NPC  for  one  year  eleven  lots  from  the  approved  subdivision
plan.

Second   was   sometime   in   1977,   the   first   time   that   NPC   filed   its   expropriation   case   against   Pobre   to   acquire   an
8,311.60  square-­meter  portion  of  the  Property.5  On  23  October  1979,  the  trial  court  ordered  the  expropriation  of  the
lots  upon  NPC's  payment  of  P25  per  square  meter  or  a  total  amount  of  P207,790.  NPC  began  drilling  operations  and
construction  of  steam  wells.  While  this  first  expropriation  case  was  pending,  NPC  dumped  waste  materials  beyond
the  site  agreed  upon  by  NPC  with  Pobre.  The  dumping  of  waste  materials  altered  the  topography  of  some  portions  of
the  Property.  NPC  did  not  act  on  Pobre's  complaints  and  NPC  continued  with  its  dumping.

Third   was   on   1   September   1979,   when   NPC   filed   its   second   expropriation   case   against   Pobre   to   acquire   an
additional   5,554   square   meters   of   the   Property.   This   is   the   subject   of   this   petition.   NPC   needed   the   lot   for   the
construction  and  maintenance  of  Naglagbong  Well  Site  F-­20,  pursuant  to  Proclamation  No.  7396   and   Republic   Act
No.  5092.7  NPC  immediately  deposited  P5,546.36  with  the  Philippine  National  Bank.  The  deposit  represented  10%  of
the   total   market   value   of   the   lots   covered   by   the   second   expropriation.   On   6   September   1979,   NPC   entered   the
5,554  square-­meter  lot  upon  the  trial  court's  issuance  of  a  writ  of  possession  to  NPC.

On  10  December  1984,  Pobre  filed  a  motion  to  dismiss  the  second  complaint  for  expropriation.  Pobre  claimed  that
NPC  damaged  his  Property.  Pobre  prayed  for  just  compensation  of  all  the  lots  affected  by  NPC's  actions  and  for  the
payment  of  damages.

On  2  January  1985,  NPC  filed  a  motion  to  dismiss  the  second  expropriation  case  on  the  ground  that  NPC  had  found
an   alternative   site   and   that   NPC   had   already   abandoned   in   1981   the   project   within   the   Property   due   to   Pobre's
opposition.

On   8   January   1985,   the   trial   court   granted   NPC's   motion   to   dismiss   but   the   trial   court   allowed   Pobre   to   adduce
evidence  on  his  claim  for  damages.  The  trial  court  admitted  Pobre's  exhibits  on  the  damages  because  NPC  failed  to
object.

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On  30  August  1985,  the  trial  court  ordered  the  case  submitted  for  decision  since  NPC  failed  to  appear  to  present  its
evidence.  The  trial  court  denied  NPC's  motion  to  reconsider  the  submission  of  the  case  for  decision.

NPC  filed  a  petition  for  certiorari8  with  the  then  Intermediate  Appellate  Court,  questioning  the  30  August  1985  Order
of  the  trial  court.  On  12  February  1987,  the  Intermediate  Appellate  Court  dismissed  NPC's  petition  but  directed  the
lower  court  to  rule  on  NPC's  objections  to  Pobre's  documentary  exhibits.

On  27  March  1987,  the  trial  court  admitted  all  of  Pobre's  exhibits  and  upheld  its  Order  dated  30  August  1985.  The
trial  court  considered  the  case  submitted  for  decision.

On  29  April  1987,  the  trial  court  issued  its  Decision  in  favor  of  Pobre.  The  dispositive  portion  of  the  decision  reads:

WHEREFORE,  premises  considered,  judgment  is  hereby  rendered  in  favor  of  the  defendant  and  against  the
plaintiff,  ordering  the  plaintiff  to  pay  unto  the  defendant:

(1)   The   sum   of   THREE   MILLION   FOUR   HUNDRED   FORTY   EIGHT   THOUSAND   FOUR   HUNDRED
FIFTY  (P3,448,450.00)   PESOS   which   is   the   fair   market   value   of   the   subdivision   of   defendant   with   an
area  of  sixty  eight  thousand  nine  hundred  sixty  nine  (68,969)  square  meters,  plus  legal  rate  of  interest
per  annum  from  September  6,  1979  until  the  whole  amount  is  paid,  and  upon  payment  thereof  by  the
plaintiff   the   defendant   is   hereby   ordered   to   execute   the   necessary   Deed   of   Conveyance   or   Absolute
Sale  of  the  property  in  favor  of  the  plaintiff;;

(2)  The  sum  of  ONE  HUNDRED  FIFTY  THOUSAND  (P150,000.00)  PESOS  for  and  as  attorney's  fees.

Costs  against  the  plaintiff.

SO  ORDERED.9

On  13  July  1987,  NPC  filed  its  motion  for  reconsideration  of  the  decision.  On  30  October  1987,  the  trial  court  issued
its  Order  denying  NPC's  motion  for  reconsideration.

NPC  appealed  to  the  Court  of  Appeals.  On  30  March  1992,  the  Court  of  Appeals  upheld  the  decision  of  the  trial  court
but  deleted  the  award  of  attorney's  fees.  The  dispositive  portion  of  the  decision  reads:

WHEREFORE,   by   reason   of   the   foregoing,   the   Decision   appealed   from   is   AFFIRMED   with   the   modification
that  the  award  of  attorney's  fees  is  deleted.  No  pronouncement  as  to  costs.

SO  ORDERED.10

The  Court  of  Appeals  denied  NPC's  motion  for  reconsideration  in  a  Resolution  dated  14  August  1992.

The  Ruling  of  the  Trial  Court

In  its  69-­page  decision,  the  trial  court  recounted  in  great  detail  the  scale  and  scope  of  the  damage  NPC  inflicted  on
the   Property   that   Pobre   had   developed   into   a   resort-­subdivision.   Pobre's   Property   suffered   "permanent   injury"
because   of   the   noise,   water,   air   and   land   pollution   generated   by   NPC's   geothermal   plants.   The   construction   and
operation  of  the  geothermal  plants  drastically  changed  the  topography  of  the  Property  making  it  no  longer  viable  as  a
resort-­subdivision.  The  chemicals  emitted  by  the  geothermal  plants  damaged  the  natural  resources  in  the  Property
and  endangered  the  lives  of  the  residents.

NPC  did  not  only  take  the  8,311.60  square-­meter  portion  of  the  Property,  but  also  the  remaining  area  of  the  68,969
square-­meter  Property.  NPC  had  rendered  Pobre's  entire  Property  useless  as  a  resort-­subdivision.  The  Property  has
become  useful  only  to  NPC.  NPC  must  therefore  take  Pobre's  entire  Property  and  pay  for  it.

The  trial  court  found  the  following  badges  of  NPC's  bad  faith:  (1)  NPC  allowed  five  years  to  pass  before  it  moved  for
the  dismissal  of  the  second  expropriation  case;;  (2)  NPC  did  not  act  on  Pobre's  plea  for  NPC  to  eliminate  or  at  least
reduce   the   damage   to   the   Property;;   and   (3)   NPC   singled   out   Pobre's   Property   for   piecemeal   expropriation   when
NPC  could  have  expropriated  other  properties  which  were  not  affected  in  their  entirety  by  NPC's  operation.

The  trial  court  found  the  just  compensation  to  be  P50  per  square  meter  or  a  total  of  P3,448,450  for  Pobre's  68,969
square-­meter   Property.   NPC   failed   to   contest   this   valuation.   Since   NPC   was   in   bad   faith   and   it   employed   dilatory
tactics  to  prolong  this  case,  the  trial  court  imposed  legal  interest  on  the  P3,448,450  from  6  September  1979  until  full
payment.  The  trial  court  awarded  Pobre  attorney's  fees  of  P150,000.

The  Ruling  of  the  Court  of  Appeals

The   Court   of   Appeals   affirmed   the   decision   of   the   trial   court.   However,   the   appellate   court   deleted   the   award   of
attorney's  fees  because  Pobre  did  not  properly  plead  for  it.

The  Issues

NPC   claims   that   the   Court   of   Appeals   committed   the   following   errors   that   warrant   reversal   of   the   appellate   court's
decision:

1.   In   not   annulling   the   appealed   Decision   for   having   been   rendered   by   the   trial   court   with   grave   abuse   of
discretion  and  without  jurisdiction;;

2.  In  holding  that  NPC  had  "taken"  the  entire  Property  of  Pobre;;

3.  Assuming  arguendo  that   there   was   "taking"   of   the   entire   Property,   in   not   excluding   from   the   Property   the
8,311.60  square-­meter  portion  NPC  had  previously  expropriated  and  paid  for;;

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4.  In  holding  that  the  amount  of  just  compensation  fixed  by  the  trial  court  at  P3,448,450.00  with  interest  from
September  6,  1979  until  fully  paid,  is  just  and  fair;;

5.  In  not  holding  that  the  just  compensation  should  be  fixed  at  P25.00  per  square  meter  only  as  what  NPC  and
Pobre  had  previously  mutually  agreed  upon;;  and

6.  In  not  totally  setting  aside  the  appealed  Decision  of  the  trial  court.11

Procedural  Issues

NPC,  represented  by  the  Office  of  the  Solicitor  General,  insists  that  at  the  time  that  it  moved  for  the  dismissal  of  its
complaint,  Pobre  had  yet  to  serve  an  answer  or  a  motion  for  summary  judgment  on  NPC.  Thus,  NPC  as  plaintiff  had
the  right  to  move  for  the  automatic  dismissal  of  its  complaint.  NPC  relies  on  Section  1,  Rule  17  of  the  1964  Rules  of
Court,   the   Rules   then   in   effect.   NPC   argues   that   the   dismissal   of   the   complaint   should   have   carried   with   it   the
dismissal  of  the  entire  case  including  Pobre's  counterclaim.

NPC's  belated  attack  on  Pobre's  claim  for  damages  must  fail.  The  trial  court's  reservation  of  Pobre's  right  to  recover
damages   in   the   same   case   is   already   beyond   review.   The   8   January   1985   Order   of   the   trial   court   attained   finality
when  NPC  failed  to  move  for  its  reconsideration  within  the  15-­day  reglementary  period.  NPC  opposed  the  order  only
on  27  May  1985  or  more  than  four  months  from  the  issuance  of  the  order.

We  cannot  fault  the  Court  of  Appeals  for  not  considering  NPC's  objections  against  the  subsistence  of  Pobre's  claim
for  damages.  NPC  neither  included  this  issue  in  its  assignment  of  errors  nor  discussed  it  in  its  appellant's  brief.  NPC
also  failed  to  question  the  trial  court's  8  January  1985  Order  in  the  petition  for  certiorari12  it  had  earlier  filed  with  the
Court  of  Appeals.  It  is  only  before  this  Court  that  NPC  now  vigorously  assails  the  preservation  of  Pobre's  claim  for
damages.  Clearly,  NPC's  opposition  to  the  existence  of  Pobre's  claim  for  damages  is  a  mere  afterthought.  Rules  of
fair  play,  justice  and  due  process  dictate  that  parties  cannot  raise  an  issue  for  the  first  time  on  appeal.13

We   must   correct   NPC's   claim   that   it   filed   the   notice   of   dismissal   just   "shortly"   after   it   had   filed   the   complaint   for
expropriation.  While  NPC  had  intimated  several  times  to  the  trial  court  its  desire  to  dismiss  the  expropriation  case  it
filed  on  5  September  1979,14  it  was  only  on  2  January  1985  that  NPC  filed  its  notice  of  dismissal.15  It  took  NPC  more
than   five   years   to   actually   file   the   notice   of   dismissal.   Five   years   is   definitely   not   a   short   period   of   time.   NPC
obviously  dilly-­dallied  in  filing  its  notice  of  dismissal  while  NPC  meanwhile  burdened  Pobre's  property  rights.

Even   a   timely   opposition   against   Pobre's   claim   for   damages   would   not   yield   a   favorable   ruling   for   NPC.   It   is   not
Section  1,  Rule  17  of  the  1964  Rules  of  Court  that  is  applicable  to  this  case  but  Rule  67  of  the  same  Rules,  as  well
as   jurisprudence   on   expropriation   cases.   Rule   17   referred   to   dismissal   of   civil   actions   in   general   while   Rule   67
specifically  governed  eminent  domain  cases.

Eminent   domain   is   the   authority   and   right   of   the   state,   as   sovereign,   to   take   private   property   for   public   use   upon
observance  of  due  process  of  law  and  payment  of  just  compensation.16  The  power  of  eminent  domain  may  be  validly
delegated   to   the   local   governments,   other   public   entities   and   public   utilities17   such   as   NPC.   Expropriation   is   the
procedure  for  enforcing  the  right  of  eminent  domain.18  "Eminent  Domain"  was  the  former  title  of  Rule  67  of  the  1964
Rules   of   Court.   In   the   1997   Rules   of   Civil   Procedure,   which   took   effect   on   1   July   1997,   the   prescribed   method   of
expropriation  is  still  found  in  Rule  67,  but  its  title  is  now  "Expropriation."

Section  1,  Rule  17  of  the  1964  Rules  of  Court  provided  the  exception  to  the  general  rule  that  the  dismissal  of  the
complaint  is  addressed  to  the  sound  discretion  of  the  court.19  For  as  long  as  all  of  the  elements  of  Section  1,  Rule  17
were  present  the  dismissal  of  the  complaint  rested  exclusively  on  the  plaintiff's  will.20  The  defending  party  and  even
the  courts  were  powerless  to  prevent  the  dismissal.21  The  courts  could  only  accept  and  record  the  dismissal.22

A  plain  reading  of  Section  1,  Rule  17  of  the  1964  Rules  of  Court  makes  it  obvious  that  this  rule  was  not  intended  to
supplement  Rule  67  of  the  same  Rules.  Section  1,  Rule  17  of  the  1964  Rules  of  Court,  provided  that:

SECTION  1.  Dismissal  by  the  plaintiff.  —  An  action  may  be  dismissed  by  the  plaintiff  without  order  of  court  by
filing   a   notice   of   dismissal   at   any   time   before   service   of   the   answer   or   of   a   motion   for   summary   judgment.
Unless  otherwise  stated  in  the  notice,  the  dismissal  is  without  prejudice,  except  that  a  notice  operates  as  an
adjudication  upon  the  merits  when  filed  by  a  plaintiff  who  has  once  dismissed  in  a  competent  court  an  action
based  on  or  including  the  same  claim.  A  class  suit  shall  not  be  dismissed  or  compromised  without  approval  of
the  court.

While  Section  1,  Rule  17  spoke  of  the  "service  of  answer  or  summary  judgment,"  the  Rules  then  did  not  require  the
filing   of   an   answer   or   summary   judgment   in   eminent   domain   cases.23   In   lieu   of   an   answer,   Section   3   of   Rule   67
required  the  defendant  to  file  a  single  motion  to  dismiss  where  he  should  present  all  of  his  objections  and  defenses
to   the   taking   of   his   property   for   the   purpose   specified   in   the   complaint.24   In   short,   in   expropriation   cases   under
Section  3  of  Rule  67,  the  motion  to  dismiss  took  the  place  of  the  answer.

The   records   show   that   Pobre   had   already   filed   and  served  on   NPC   his   "motion   to   dismiss/answer"25   even   before
NPC  filed  its  own  motion  to  dismiss.  NPC  filed  its  notice  of  dismissal  of  the  complaint  on  2  January  1985.  However,
as   early   as   10   December   1984,   Pobre   had   already   filed   with   the   trial   court   and   served   on   NPC   his   "motion   to
dismiss/answer."  A  certain  Divina  Cerela  received  Pobre's  pleading  on  behalf  of  NPC.26  Unfortunately  for  NPC,  even
Section  1,  Rule  17  of  the  1964  Rules  of  Court  could  not  save  its  cause.

NPC  is  in  no  position  to  invoke  Section  1,  Rule  17  of  the  1964  Rules  of  Court.  A  plaintiff  loses  his  right  under  this  rule
to  move  for  the  immediate  dismissal  of  the  complaint  once  the  defendant  had  served  on  the  plaintiff  the  answer  or  a
motion  for  summary  judgment  before  the  plaintiff  could  file  his  notice  of  dismissal  of  the  complaint.27  Pobre's  "motion
to  dismiss/answer,"  filed  and  served  way  ahead  of  NPC's  motion  to  dismiss,  takes  the  case  out  of  Section  1,  Rule  17
assuming  the  same  applies.

In   expropriation   cases,   there   is   no   such   thing   as   the   plaintiff's   matter   of   right   to   dismiss   the   complaint   precisely
because   the   landowner   may   have   already   suffered   damages   at   the   start   of   the   taking.   The   plaintiff's   right   in
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expropriation   cases   to   dismiss   the   complaint   has   always   been   subject   to   court   approval   and   to   certain
conditions.28The  exceptional  right  that  Section  1,  Rule  17  of  the  1964  Rules  of  Court  conferred  on  the  plaintiff  must
be   understood   to   have   applied   only   to   other   civil   actions.   The   1997   Rules   of   Civil   Procedure   abrogated   this
exceptional  right.29

The  power  of  eminent  domain  is  subject  to  limitations.  A  landowner  cannot  be  deprived  of  his  right  over  his  land  until
expropriation  proceedings  are  instituted  in  court.30  The  court  must  then  see  to  it  that  the  taking  is  for  public  use,  there
is  payment  of  just  compensation  and  there  is  due  process  of  law.31

If  the  propriety  of  the  taking  of  private  property  through  eminent  domain  is  subject  to  judicial  scrutiny,  the  dismissal  of
the   complaint   must   also   pass   judicial   inquiry   because   private   rights   may   have   suffered   in   the   meantime.   The
dismissal,  withdrawal  or  abandonment  of  the  expropriation  case  cannot  be  made  arbitrarily.  If  it  appears  to  the  court
that   the   expropriation   is   not   for   some   public   use,32   then   it   becomes   the   duty   of   the   court   to   dismiss   the
action.33However,   when   the   defendant   claims   that   his   land   suffered   damage   because   of   the   expropriation,   the
dismissal  of  the  action  should  not  foreclose  the  defendant's  right  to  have  his  damages  ascertained  either  in  the  same
case  or  in  a  separate  action.34

Thus,  NPC's  theory  that  the  dismissal  of  its  complaint  carried  with  it  the  dismissal  of  Pobre's  claim  for  damages  is
baseless.  There  is  nothing  in  Rule  67  of  the  1964  Rules  of  Court  that  provided  for  the  dismissal  of  the  defendant's
claim  for  damages,  upon  the  dismissal  of  the  expropriation  case.  Case  law  holds  that  in  the  event  of  dismissal  of  the
expropriation  case,  the  claim  for  damages  may  be  made  either  in  a  separate  or  in  the  same  action,  for  all  damages
occasioned  by  the  institution  of  the  expropriation  case.35  The  dismissal  of  the  complaint  can  be  made  under  certain
conditions,   such   as   the   reservation   of   the   defendant's   right   to   recover   damages   either   in   the   same   or   in   another
action.36  The  trial  court  in  this  case  reserved  Pobre's  right  to  prove  his  claim  in  the  same  case,  a  reservation  that  has
become  final  due  to  NPC's  own  fault.

Factual  Findings  of  the  Trial  and  Appellate  Courts  Bind  the  Court

The  trial  and  appellate  courts  held  that  even  before  the  first  expropriation  case,  Pobre  had  already  established  his
Property   as   a   resort-­subdivision.   NPC   had   wrought   so   much   damage   to   the   Property   that   NPC   had   made   the
Property  uninhabitable  as  a  resort-­subdivision.  NPC's  facilities  such  as  steam  wells,  nag  wells,  power  plants,  power
lines,  and  canals  had  hemmed  in  Pobre's  Property.  NPC's  operations  of  its  geothermal  project  also  posed  a  risk  to
lives  and  properties.

We  uphold  the  factual  findings  of  the  trial  and  appellate  courts.  Questions  of  facts  are  beyond  the  pale  of  Rule  45  of
the  Rules  of  Court  as  a  petition  for  review  may  only  raise  questions  of  law.37   Moreover,   factual   findings   of   the   trial
court,   particularly   when   affirmed   by   the   Court   of   Appeals,   are   generally   binding   on   this   Court.38   We   thus   find   no
reason  to  set  aside  the  two  courts'  factual  findings.

NPC  points  out  that  it  did  not  take  Pobre's  68,969  square-­meter  Property.  NPC  argues  that  assuming  that  it  is  liable
for  damages,  the  8,311.60  square-­meter  portion  that  it  had  successfully  expropriated  and  fully  paid  for  should  have
been  excluded  from  the  68,969  square-­meter  Property  that  Pobre  claims  NPC  had  damaged.

We  are  not  persuaded.

In  its  30  October  1987  Order  denying  NPC's  motion  for  reconsideration,  the  trial  court  pointed  out  that  the  Property
originally   had   a   total   area   of   141,300   square   meters.39   Pobre   converted   the   Property   into   a   resort-­subdivision   and
sold  lots  to  the  public.  What  remained  of  the  lots  are  the  68,969  square  meters  of  land.40   Pobre  no  longer  claimed
damages  for  the  other  lots  that  he  had  before  the  expropriation.

Pobre  identified  in  court  the  lots  forming  the  68,969  square-­meter  Property.  NPC  had  the  opportunity  to  object  to  the
identification   of   the   lots.41   NPC,   however,   failed   to   do   so.   Thus,   we   do   not   disturb   the   trial   and   appellate   courts'
finding  on  the  total  land  area  NPC  had  damaged.

NPC  must  Pay  Just  Compensation  for  the  Entire  Property

Ordinarily,   the   dismissal   of   the   expropriation   case   restores   possession   of   the   expropriated   land   to   the
landowner.42However,   when   possession   of   the   land   cannot   be   turned   over   to   the   landowner   because   it   is   neither
convenient   nor   feasible   anymore   to   do   so,   the   only   remedy   available   to   the   aggrieved   landowner   is   to   demand
payment  of  just  compensation.43

In   this   case,   we   agree   with   the   trial   and   appellate   courts   that   it   is   no   longer   possible   and   practical   to   restore
possession   of   the   Property   to   Pobre.   The   Property   is   no   longer   habitable   as   a   resort-­subdivision.   The   Property   is
worthless  to  Pobre  and  is  now  useful  only  to  NPC.  Pobre  has  completely  lost  the  Property  as  if  NPC  had  physically
taken  over  the  entire  68,969  square-­meter  Property.

In  United  States  v.  Causby,44  the  U.S.  Supreme  Court  ruled  that  when  private  property  is  rendered  uninhabitable  by
an   entity   with   the   power   to   exercise   eminent   domain,   the   taking   is   deemed   complete.   Such   taking   is   thus
compensable.

In  this  jurisdiction,  the  Court  has  ruled  that  if  the  government  takes  property  without  expropriation  and  devotes  the
property   to   public   use,   after   many   years   the   property   owner   may   demand   payment   of   just   compensation.45   This
principle  is  in  accord  with  the  constitutional  mandate  that  private  property  shall  not  be  taken  for  public  use  without
just  compensation.46

In   the   recent   case   of   National   Housing   Authority   v.   Heirs   of   Isidro   Guivelondo,47   the   Court   compelled   the
National   Housing   Authority   ("NHA")   to   pay   just   compensation   to   the   landowners   even   after   the   NHA   had   already
abandoned  the  expropriation  case.  The  Court  pointed  out  that  a  government  agency  could  not  initiate  expropriation
proceedings,  seize  a  person's  property,  and  then  just  decide  not  to  proceed  with  the  expropriation.  Such  a  complete
turn-­around  is  arbitrary  and  capricious  and  was  condemned  by  the  Court  in  the  strongest  possible  terms.  NHA  was
held  liable  to  the  landowners  for  the  prejudice  that  they  had  suffered.
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In  this  case,  NPC  appropriated  Pobre's  Property  without  resort  to  expropriation  proceedings.  NPC  dismissed  its  own
complaint  for  the  second  expropriation.  At  no  point  did  NPC  institute  expropriation  proceedings  for  the  lots  outside
the  5,554  square-­meter  portion  subject  of  the  second  expropriation.  The  only  issues  that  the  trial  court  had  to  settle
were  the  amount  of  just  compensation  and  damages  that  NPC  had  to  pay  Pobre.

This  case  ceased  to  be  an  action  for  expropriation  when  NPC  dismissed  its  complaint  for  expropriation.  Since  this
case   has   been   reduced   to   a   simple   case   of   recovery   of   damages,   the   provisions   of   the   Rules   of   Court   on   the
ascertainment   of   the   just   compensation   to   be   paid   were   no   longer   applicable.   A   trial   before   commissioners,   for
instance,  was  dispensable.

We   have   held   that   the   usual   procedure   in   the   determination   of   just   compensation   is   waived   when   the   government
itself   initially   violates   procedural   requirements.48   NPC's   taking   of   Pobre's   property   without   filing   the   appropriate
expropriation  proceedings  and  paying  him  just  compensation  is  a  transgression  of  procedural  due  process.

From   the   beginning,   NPC   should   have   initiated   expropriation   proceedings   for   Pobre's   entire   68,969   square-­meter
Property.  NPC  did  not.  Instead,  NPC  embarked  on  a  piecemeal  expropriation  of  the  Property.  Even  as  the  second
expropriation   case   was   still   pending,   NPC   was   well   aware   of   the   damage   that   it   had   unleashed   on   the   entire
Property.   NPC,   however,   remained   impervious   to   Pobre's   repeated   demands   for   NPC   to   abate   the   damage   that   it
had  wrought  on  his  Property.

NPC   moved   for   the   dismissal   of   the   complaint   for   the   second   expropriation   on   the   ground   that   it   had   found   an
alternative  site  and  there  was  stiff  opposition  from  Pobre.49  NPC  abandoned  the  second  expropriation  case  five  years
after   it   had   already   deprived   the   Property   virtually   of   all   its   value.   NPC   has   demonstrated   its   utter   disregard   for
Pobre's  property  rights.

Thus,  it  would  now  be  futile  to  compel  NPC  to  institute  expropriation  proceedings  to  determine  the  just  compensation
for   Pobre's   68,969   square-­meter   Property.   Pobre   must   be   spared   any   further   delay   in   his   pursuit   to   receive   just
compensation  from  NPC.

Just  compensation  is  the  fair  and  full  equivalent  of  the  loss.50  The  trial  and  appellate  courts  endeavored  to  meet  this
standard.  The  P50  per  square  meter  valuation  of  the  68,969  square-­meter  Property  is  reasonable  considering  that
the  Property  was  already  an  established  resort-­subdivision.  NPC  has  itself  to  blame  for  not  contesting  the  valuation
before  the  trial  court.  Based  on  the  P50  per  square  meter  valuation,  the  total  amount  of  just  compensation  that  NPC
must  pay  Pobre  is  P3,448,450.

The  landowner  is  entitled  to  legal  interest  on  the  price  of  the  land  from  the  time  of  the  taking  up  to  the  time  of  full
payment   by   the   government.51   In   accord   with   jurisprudence,   we   fix   the   legal   interest   at   six   per   cent   (6%)   per
annum.52   The  legal  interest  should  accrue  from  6  September  1979,  the  date  when  the  trial  court  issued  the  writ  of
possession  to  NPC,  up  to  the  time  that  NPC  fully  pays  Pobre.53

NPC's   abuse   of   its   eminent   domain   authority   is   appalling.   However,   we   cannot   award   moral   damages   because
Pobre  did  not  assert  his  right  to  it.54   We  also  cannot  award  attorney's  fees  in  Pobre's  favor  since  he  did  not  appeal
from  the  decision  of  the  Court  of  Appeals  denying  recovery  of  attorney's  fees.55

Nonetheless,  we  find  it  proper  to  award  P50,000  in  temperate  damages  to  Pobre.  The  court  may  award  temperate  or
moderate   damages,   which   are   more   than   nominal   but   less   than   compensatory   damages,   if   the   court   finds   that   a
party   has   suffered   some   pecuniary   loss   but   its   amount   cannot   be   proved   with   certainty   from   the   nature   of   the
case.56As  the  trial  and  appellate  courts  noted,  Pobre's  resort-­subdivision  was  no  longer  just  a  dream  because  Pobre
had   already   established   the   resort-­subdivision   and   the   prospect   for   it   was   initially   encouraging.   That   is,   until   NPC
permanently  damaged  Pobre's  Property.  NPC  did  not  just  destroy  the  property.  NPC  dashed  Pobre's  hope  of  seeing
his  Property  achieve  its  full  potential  as  a  resort-­subdivision.

The  lesson  in  this  case  must  not  be  lost  on  entities  with  eminent  domain  authority.  Such  entities  cannot  trifle  with  a
citizen's  property  rights.  The  power  of  eminent  domain  is  an  extraordinary  power  they  must  wield  with  circumspection
and   utmost   regard   for   procedural   requirements.   Thus,   we   hold   NPC   liable   for   exemplary   damages   of   P100,000.
Exemplary   damages   or   corrective   damages   are   imposed,   by   way   of   example   or   correction   for   the   public   good,   in
addition  to  the  moral,  temperate,  liquidated  or  compensatory  damages.57

WHEREFORE,   we   DENY   the   petition   for   lack   of   merit.   The   appealed   Decision   of   the   Court   of   Appeals   dated   30
March  1992  in  CA-­G.R.  CV  No.  16930  is  AFFIRMED  with  MODIFICATION.  National  Power  Corporation  is  ordered  to
pay   Antonino   Pobre   P3,448,450   as   just   compensation   for   the   68,969   square-­meter   Property   at   P50   per   square
meter.  National  Power  Corporation  is  directed  to  pay  legal  interest  at  6%  per  annum  on  the  amount  adjudged  from  6
September  1979  until  fully  paid.  Upon  National  Power  Corporation's  payment  of  the  full  amount,  Antonino  Pobre  is
ordered   to   execute   a   Deed   of   Conveyance   of   the   Property   in   National   Power   Corporation's   favor.   National   Power
Corporation  is  further  ordered  to  pay  temperate  and  exemplary  damages  of  P50,000  and  P100,000,  respectively.  No
costs.

SO  ORDERED.

Davide,  Jr.,  C.J.,  (Chairman),  Quisumbing,  Ynares-­Santiago,  and  Azcuna,  JJ.,  concur.

Footnotes
1  
Under  Rule  45  of  the  1964  Rules  of  Court.
2  
Penned  by  Associate  Justice  Fermin  A.  Martin,  Jr.  with  Associate  Justices  Luis  A.  Javellana  and  Artemon  D.
Luna  concurring.
3  
Penned  by  Judge  Oscar  B.  Pimentel.
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4  
By  virtue  of  Republic  Act  No.  6395,  "An  Act  Revising  the  Charter  of  the  National  Power  Corporation,"  as
amended.
5  
Docketed  as  Civil  Case  No.  T-­50  in  the  then  Court  of  First  Instance,  Branch  VI,  Tabaco,  Albay.
6  
"Tiwi  Geothermal  Reservation."
7  
"An  Act  to  Promote  and  Regulate  the  Exploration,  Development,  Exploitation  and  Utilization  of  Geothermal
Energy,  Natural  Gas  and  Methane  Gas,  to  Encourage  its  Conservation,  and  for  other  Purposes."
8  
Docketed  as  CA-­G.R.  SP  No.  07682.
9  
Rollo,  p.  109.
10  
Ibid.,  p.  139.
11  
Rollo,  pp.  234-­235.
12  
Supra  note  8.
13  
Cruz  v.  Court  of  Appeals,  G.R.  No.  108738,  17  June  1994,  233  SCRA  301.
14  
Records,  pp.  38-­39,  43.
15  
Ibid.,  p.  45.
16  
Visayan  Refining  Co.  v.  Camus,  40  Phil.  550  (1919).
17  
Moday  v.  Court  of  Appeals,  G.R.  No.  107916,  20  February  1997,  268  SCRA  586.
18  
OSCAR  M.  HERRERA,  REMEDIAL  LAW,  Vol.  III,  1999  ed.,  311.
19  
BA  Finance  Corporation  v.  Co,  G.R.  No.  105751,  30  June  1993,  224  SCRA  163.
20  
Ibid.
21  
Ibid.
22  
Ibid.
23  
Section  3,  Rule  67  of  the  1997  Rules  of  Civil  Procedure  now  requires  the  filing  of  an  answer  in  expropriation
cases.
24  
Section  3,  Rule  67  of  the  1997  Rules  of  Civil  Procedure  reads:

SEC.  3.  Defenses  and  objections.  —  If  a  defendant  has  no  objection  or  defense  to  the  action  or  the
taking  of  his  property,  he  may  file  and  serve  a  notice  of  appearance  and  a  manifestation  to  that  effect,
specifically  designating  or  identifying  the  property  in  which  he  claims  to  be  interested,  within  the  time
stated  in  the  summons.  Thereafter,  he  shall  be  entitled  to  notice  of  all  proceedings  affecting  the  same.

If  a  defendant  has  any  objection  to  the  filing  of  or  the  allegations  in  the  complaint,  or  any  objection  or
defense  to  the  taking  of  his  property,  he  shall  serve  his  answer  within  the  time  stated  in  the  summons.
The  answer  shall  specifically  designate  or  identify  the  property  in  which  he  claims  to  have  an  interest,
state  the  nature  and  extent  of  the  interest  claimed,  and  adduce  all  his  objections  and  defenses  to  the
taking  of  his  property.  No  counterclaim,  cross-­claim  or  third-­party  complaint  shall  be  alleged  or  allowed
in  the  answer  or  any  subsequent  pleading.

A  defendant  waives  all  defenses  and  objections  not  so  alleged  but  the  court,  in  the  interest  of  justice,
may  permit  amendments  to  the  answer  to  be  made  not  later  than  ten  (10)  days  from  the  filing  thereof.
However,  at  the  trial  of  the  issue  of  just  compensation,  whether  or  not  a  defendant  has  previously
appeared  or  answered,  he  may  present  evidence  as  to  the  amount  of  the  compensation  to  be  paid  for
his  property,  and  he  may  share  in  the  distribution  of  the  award.
25  
Records,  pp.  40-­42.
26  
Ibid.,  p.  42.
27  
Go  v.  Cruz,  G.R.  No.  58986,  17  April  1989,  172  SCRA  247.
28  
See  Republic  of  the  Philippines  v.  Baylosis,  109  Phil.  580  (1960);;  Metropolitan  Water  District  v.  De  Los
Angeles,  55  Phil.  776  (1931).
29  
Section  1,  Rule  17  of  the  1997  Rules  of  Civil  Procedure  no  longer  makes  the  dismissal  of  the  complaint
automatic.  The  right  of  the  plaintiff  to  dismiss  his  action  before  the  defendant  has  filed  his  answer  or  asked  for
summary  judgment  must  be  first  confirmed  by  the  court  in  an  order  issued  by  it.  The  new  provision  reads:

SEC.  2.  Dismissal  upon  motion  of  plaintiff.  —  Except  as  provided  in  the  preceding  section,  a  complaint
shall  not  be  dismissed  at  the  plaintiff's  instance  save  upon  the  approval  of  the  court  and  upon  such
terms  and  conditions  as  the  court  deems  proper.  If  a  counterclaim  has  been  pleaded  by  a  defendant
prior  to  the  service  upon  him  of  the  plaintiff's  motion  for  dismissal,  the  dismissal  shall  be  limited  to  the
complaint.  The  dismissal  shall  be  without  prejudice  to  the  right  of  the  defendant  to  prosecute  his
counterclaim  in  a  separate  action  unless  within  fifteen  (15)  days  from  notice  of  the  motion  he  manifests

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his  preference  to  have  his  counterclaim  resolved  in  the  same  action.  Unless  otherwise  specified  in  the
order,  a  dismissal  under  this  paragraph  shall  be  without  prejudice.  A  class  suit  shall  not  be  dismissed  or
compromised  without  the  approval  of  the  court.
30  
Ibid.
31  
Visayan  Refining  Co.  v.  Camus,  supra  note  16.
32  
Metropolitan  Water  District  v.  De  Los  Angeles,  supra  note  28.
33  
Ibid.
34  
Ibid.
35  
Ibid.
36  
Ibid.
37  
Inland  Trailways,  Inc.  v.  Court  of  Appeals,  325  Phil.  457  (1996).
38  
Fuentes  v.  Court  of  Appeals,  G.R.  No.  109849,  26  February  1997,  268  SCRA  703.
39  
Records,  p.  253.
40  
Ibid.
41  
TSN,  5  February  1985,  pp.  14-­22.
42  
Metropolitan  Water  District  v.  De  Los  Angeles,  supra  note  28.
43  
Militante  v.  Court  of  Appeals,  386  Phil.  522  (2000);;  Amigable  v.  Cuenca,  150  Phil.  422  (1972);;  Ministerio  v.
Court  of  First  Instance  of  Cebu,  148-­B  Phil.  474  (1971);;  Alfonso  v.  Pasay  City,  106  Phil.  1017  (1960).
44  
328  U.S.  256  (1946).
45  
Supra  note  43.
46  
Section  2,  Article  IV  of  the  1973  Constitution  is  now  enshrined  in  Section  9,  Article  III  of  the  1987
Constitution.
47  
G.R.  No.  154411,  19  June  2003,  404  SCRA  389.
48  
Rocamora  v.  RTC-­Cebu  (Branch  VIII),  No.  L-­65037,  23  November  1988,167  SCRA  615.
49  
Records,  p.  45.
50  
Manila  Railroad  Co.  v.  Velasquez,  32  Phil.  286  (1915).
51  
De  Los  Santos  v.  Intermediate  Appellate  Court,  G.R.  Nos.  71998-­99,  2  June  1993,  223  SCRA  11;;  National
Power  Corporation  v.  Court  of  Appeals,  214  Phil.  583  (1984);;  Amigable  v.  Cuenca,  150  Phil.  422  (1972).
52  
National  Power  Corporation  v.  Court  of  Appeals,  214  Phil.  583  (1984).
53  
Ibid.
54  
People  v.  Adora,  341  Phil.  441  (1997).
55  
National  Power  Corporation  v.  Court  of  Appeals,  supra  note  52.
56  
Article  2224,  Civil  Code.
57  
Article  2229,  Civil  Code.

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